Daily Rate Update: April 6th-10th

Like the cavalry to the rescue, the Fed came over the hill today and set forth an unprecedented stimulus package to the tune of $2.3T to again provide liquidity, relief and help to stimulate the economy. From the Fed’s statement this morning: The Federal Reserve on Thursday took additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic.

Mortgage rates remained unchanged in the latest week and at historic lows due in part to uncertainty surrounding the economic fallout from the coronavirus. Freddie Mac reports that the 30-year fixed-rate mortgage was at 3.33% with 0.7 in points and fees. Low rates will continue to be seen given the current environment along with low inflation.

The number of Americans filing for first-time unemployment claims surged once again in the latest week as the shutdown continues due to the coronavirus. Weekly Initial Jobless Claims soared by 6.606 million last week bringing the three-week post-shutdown total to a staggering 16.67 million! In addition, many states can’t haven’t even processed many more claims given the volumes. There will be more pain to come until the government opens up the economy for business.

The coronavirus fears continue to impact all sectors of the U.S. economy due to the soaring unemployment claims and a slowing economy. Fannie Mae released its March Home Purchase Sentiment revealing that it fell 11.7 points to 80.8 in March, its lowest reading since December 2016. Consumers also reported that homebuying and home-selling conditions have worsened and took a more pessimistic view of home price growth. Doug Duncan, Senior Vice President and Chief Economist said, “Americans are reporting greater concern about their job security than at any point in the last six years. Attitudes about current home-selling environment deteriorated markedly, falling to their lowest level since January 2017.”

Home prices rose in February after solid gains in January though before the coronavirus became a threat here in the U.S. CoreLogic reports that home prices nationwide, including distressed sales, rose 4.1% from February 2019 to February 2020. On a monthly basis, prices rose 0.6% from January to February. “Before the onset of the pandemic, the quickening of home price growth during the first two months of 2020 highlighted the strength of purchase activity,” said Dr. Frank Nothaft, chief economist at CoreLogic.

Job openings remained elevated in February before the onset of the coronavirus shutdown. The Labor Department reports that job openings were nearly 7 million in February but those numbers will fall in a big way come March and April. The past two weeks saw 10 million in first-time unemployment gains with this week’s numbers expected to be in the same range. The March Jobs Report saw 701,000 jobs lost in the government’s Jobs Report.

The major U.S. stock indexes are rebounding today on hopes that coronavirus cases are peaking across the globe. New York State saw a slowdown in virus-related deaths and Italy has seen the smallest amount of deaths in two weeks. Australia could begin loosening virus-related restrictions next week. The rise in equity prices is luring money from the bond markets as the yield on the 10-year T Note has risen to .66%. As Treasury prices decline, yields move higher and vice versa.

The U.S. markets will get a breather this week from the chaos that has been happening since the coronavirus hit. This week is holiday shortened with an early close on Thursday at 2:00 p.m. ET for the bond markets and both the stock and bond markets are closed for Good Friday.

Here in the U.S., there are 336,907 cases of the coronavirus that includes 234 new cases with 9,624 total deaths. There are 1,288,474 cases of the virus reported worldwide, 70,569 deaths while 272,074 having recovered from the virus. Current risk assessment from the CDC: The immediate risk of being exposed to this virus is still low for most Americans, but as the outbreak expands, that risk will increase. Cases of COVID-19 and instances of community spread are being reported in a growing number of states.